Simultaneous (Concurrent) Exchange: The sale of the Relinquished Property and the purchase of the like-kind Replacement Property occurs at the same time. While this was the original intent of the 1031 Tax Code, this type of exchange is rarely performed today.
Forward (Deferred) Exchange: This is the most common form of 1031 Exchange transactions today. A Forward or Deferred Exchange occurs when there is a time delay between the sale of the Relinquished Property and the purchase of the “like-kind” Replacement Property. A Forward (Deferred) Exchange is subject to specific time limits and guidelines established by the IRS.
Reverse Exchange: A less common structure, a Reverse Exchange occurs when the Replacement Property is purchased first, prior to selling the Relinquished Property to the actual buyer. Reverse 1031 exchanges are also referred to as parking transactions or parking arrangements.
Build-to-Suit (Improvement or Construction) Exchange: This type of exchange allows the taxpayer to build on, or make improvements to, the like-kind replacement property, using the exchange proceeds before they actually take title to the property.
Personal Property Exchange: Personal property can also be exchanged for other personal property of like-kind or like-class as long as the personal property has been held for investment, income production (rental) or use in a business. Examples of Personal Property Exchanges include artwork, race horses, agricultural and construction equipment, antique cars, patents, franchise licenses, airplanes and fleets of cars or trucks.